At December 31, 2025, Kelmscott Mining tests a machine for impairment (IAS 36). Before the test, the machine’s carrying amount is $80,000 after the current-year depreciation charge of $10,000. Its recoverable amount is estimated at $62,000.
| Date | Event |
|---|
| December 31, 2025 | Recorded the annual depreciation of $10,000. |
| December 31, 2025 | Recognised the impairment loss (carrying amount $80,000 vs recoverable amount $62,000). |
Required: Prepare the depreciation entry and the impairment entry. The impairment loss is $80,000 − $62,000 = $18,000, credited to Accumulated Depreciation - Equipment.